City of New Orleans Press Releases

FOR IMMEDIATE RELEASE
October 30, 2009

MAYOR NAGIN PRESENTS 2010 BUDGET PROPOSAL

PLAN ADDRESSES $68 MILLION FUNDING SHORTFALL
(NEW ORLEANS) - October 30, 2009 --In his final budget address, Mayor C. Ray Nagin today presented his plan for addressing the projected $68 million shortfall for the 2010 budget while maintaining the current services and outlined his vision for ensuring a strong future.

Mayor Nagin's budget, which has the theme "Sustaining our Recovery," illustrates the success of the city's recovery and rebuilding programs. According to the presentation, the City is seeing increased obligations from FEMA for rebuilding projects, has received state approval for most programs that will use the $411 million Disaster Community Development Block Grant funds and has encumbered 87 percent of the $200 million Revolving Loan Fund approved by the State Legislature to provide funding for FEMA reimbursable projects.

At the same time, the operating budget faces difficulties. The City originally projected a $43 million shortfall, which increased to $68 million as a result of lower than expected tax collections, additional unforeseen pension increases, additional worker's compensation costs, court ordered salary increases for firefighters, and the accelerated use of the remaining $10 million in Federal Community Disaster Loans.

"For 2010, we face the second largest budget deficit in our city's history," said Mayor Nagin. "But while we will have to make some difficult choices, we can get through this period."

The plan Mayor Nagin presented today focuses on both decreasing expenses and increasing revenues. The major proposals include:

Increase collections of the sanitation service charge
Enforce compliance with brake tag laws
Adjust various fees to be consistent with inflation
Reduce budget in Mayor's Office and City Council Office by 10 percent
Extend parking meters to 13-hours a day, six days a week
Increase premiums and co-payments for employee health plan
Implement 12 unpaid furlough days for all city employees

"This is the third major budget challenge we have faced since I was elected," said Mayor Nagin. "When I came into office, there were only two days of cash in the bank. Then after Hurricane Katrina, our entire economy was shut down, which left us with a shortfall of $205 million for 2010. Each time we have persevered. But it also is time that we put a structure into place to ensure that we can sustain our recovery."

The Mayor's address also illustrated the need for sufficient recurring revenues to address the city's continued growth. Because of the failure to roll forward millages to pre-Katrina levels in 2006 and 2007, property tax revenues have decreased dramatically over the since Hurricane Katrina, despite a 28 percent increase in property valuations. The City has become more dependent on sales taxes, which have decreased greatly as a result of the economic downturn.

Mayor Nagin said that in order to sustain its recovery, the city must ensure an adequate operating budget, adequate staffing to support citizen need, sufficient resources for maintenance, continued restoration of streets and facilities, and sufficient reserve funds in case of emergency.

Without additional recurring revenues, the City likely will face major funding difficulties for at least five years, according to the Revenue Estimating Conference. This could mean higher fees for citizens, fewer services such as grass cutting, code enforcement and recreation; a potential reduction in public safety and the possibility of future four-day city operations.

The Mayor also used his final budget address to outline his vision of the "Keys to the Future" for the city. Those keys include an adequate operating budget to fuel growth; a sufficient fund balance to handle emergencies; stronger laws for holding private property owners accountable for reducing blight; completion of the "Big Four" housing developments, and renovation of Iberville community; completion of a world class; completion of a world class medical district; and increasing home ownership to national averages.

The City Council now begins a series of meetings regarding the budget. The Council must adopt a balanced budget by December 1.

Visit www.cityofno.com for 2010 Budget Information or click on the links below.

2010 Budget Presentation
Overview
Impact on City Employees
Katrina Budget Impact
Sustaining Our Recovery
City Deficit Comparison

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CITY OF NEW ORLEANS
Mayor’s Press Office
1300 Perdido Street, Suite 2E04
New Orleans, Louisiana 70112